Posts Tagged ‘technical analysis’
OpenTable’s Niche in the Dine-Out Crowd a Hit in This Stock Market
By George Leong, B.Comm. for Profit Confidential
The Internet was the hottest and most exciting sector in the late 90s, when Internet stocks initially came to the market. Of course, that was prior to the Internet stocks implosion in early 2000 that left the NASDAQ hemorrhaging from deep losses after trading above 5,000. Fast-forward 13 years and while the NASDAQ is heading for its third year of gains since 2010, the index remains well below its high point in 2000.
Internet stocks are a favorite of mine. This is where I believe some of the top money will be made going forward, with Internet stocks like Google Inc. (NASDAQ/GOOG), priceline.com Incorporated (NASDAQ/PCLN), and LinkedIn Corporation (NASDAQ/LNKD). Alternatively, there are other niche-market Internet stocks deserving of a look. (Read my thoughts in “Why There’s No Stopping the Internet Sector.”)
Take a look at the chart of the Internet Index below and the decisive upward trend since late 2002 as indicated by the solid blue line. Note the three successive higher tops as reflected by the short horizontal blue lines.
Internet stocks are clearly in an upward trend, based on my technical analysis.
Chart courtesy of www.StockCharts.com
While the majority of you are familiar with the brand-name Internet stocks I’ve already mentioned in this article, an up-and-coming small-cap Internet play that I feel has a great niche market and is worth a closer look is OpenTable, Inc. (NASDAQ/OPEN).
Having used the OpenTable service on a regular basis, I like the service, and I feel it offers users a valuable way of booking restaurant reservations.
OpenTable provides a real-time online restaurant reservation system that is free to use … Read More
Why Japan Is Now on a Tear Toward Economic Recovery
By George Leong, B.Comm. for Profit Confidential
Chinese stocks are a disappointment in 2013 and, at this point, are looking to underperform the U.S. stock market for the fourth consecutive year.
But while China sorts out its growth issues, across the East China Sea, Japan has been on a tear. The massive infusion of liquidity into the Japanese monetary system has driven down the yen and, in the process, is leading to an export-led economic recovery.
The benchmark Nikkei 225 stock market index is up a whopping 36.4% this year, breaking above the 14,000 level for the first time in close to five years.
Take a look at the technical analysis chart below, comparing the movement of the Nikkei 225 index, as indicated by the upward-trending solid green line, and the downward-moving yen.
As the yen weakens, the Japanese stock market rises, Japanese goods become cheaper to buy from foreigners, and this drives up sales of the many Japanese multinationals.
Chart courtesy of www.StockCharts.com
At the same time, the Shanghai Stock Exchange (SSE) Composite Index is down 1.5% and is struggling to convince the world that not all Chinese companies are deceitful. (Read my take in “China in a Holding Pattern, but There Are Opportunities Inside the Great Wall.”)
The chart below shows the movement of the Nikkei 225 stock market, as shown in the candlestick formation, versus the SSE Composite Index, as indicated by the green line.
You’ll notice the outperformance of the Shanghai stock market from 1990 to around 2008, and then the current rally by the Nikkei.
Chart courtesy of www.StockCharts.com
I must admit I was caught off guard by the strength … Read More
How Copper Prices Suggest Stocks Are Priced Too High
By George Leong, B.Comm. for Profit Confidential
The S&P 500 traded at another record high last Thursday, and there appears to be no stopping the bullish investor sentiment that has encapsulated the stock market.
Yet, while the stock market gains are great for the bulls, I still have an issue with the rate of the stock market rally. Simply stated, it’s just a bit too fast, too quick.
I also wonder why the stock market is ignoring the continued fragile state of the global economy in spite of a deep recession in the eurozone and stalling in China.
The reality is that we need to be concerned about how the global economy is faring. The idea of focusing too much on only America doesn’t make sense due to the increased correlation between the global economies. Slowing in Asia and Europe will impact U.S. companies. (Read “Why America Will Struggle if the Eurozone Languishes.”)
Looking at China, while the Chinese economy continues to expand at rates we can only dream of, the country is stalling, as reflected in its demand for commodities.
Copper is a key commodity used in wiring, pipes, electronics, and other areas. When the economy expands, so does the demand for copper.
China imported less copper in February with imports declining to a 20-month low, according to the country’s General Administration of Customs (Source: “China Copper Imports Slump to 20-Month Low on Holidays,” Bloomberg, March 7, 2013, last accessed May 6, 2013.) China is the world’s top importer of copper, so the decline in the import number is important. (Source: “International Trade Centre,” NationMaster.com, last accessed May 6, 2013.)
The lower … Read More
Why There’s No Stopping the Internet Sector
By George Leong, B.Comm. for Profit Confidential
The stock market is attracting some serious buying euphoria toward Internet stocks, especially social media and Internet information providers.
The key to success for these companies that provide information and services online is the viewership and ability of the site to generate revenues and drive profits.
Other than Google Inc. (NASDAQ/GOOG),one of the most widely followed Internet stocks is Facebook, Inc. (NASDAQ/FB), which just announced it had 1.1 billion subscribers and is beginning to garnish revenues from the high-potential mobile advertising business. (Read “Facebook Does an About-Face: Set to Move Higher?”)
Facebook is attracting buyers, as its stock price may be on the verge of breaking $30.00, a level not achieved since February 1, 2013. Facebook is one of those Internet stocks that are an excellent investment, especially if it can continue to take advantage and monetize its massive subscriber base.
In the travel sector, one of the top Internet stocks is online travel operator priceline.com Incorporated (NASDAQ/PCLN). But with its share price above $700.00, the stock is out of reach for many.
In the online restaurant area, one of the leading Internet stocks is OpenTable, Inc. (NASDAQ/OPEN), which is still classified as a small-cap that I believe has excellent price appreciation potential.
One of the newer Internet stocks is Yelp, Inc. (NASDAQ/YELP), which operates local business sites across many cities and countries and links consumers to local businesses. Since debuting on March 2, 2012 at $22.00, the stock has gained 50%, including a 25% spike on Thursday after reporting an excellent quarter that displayed superlative growth.
In the first quarter, Yelp generated revenues of $46.1 million, up … Read More
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